Jakarta – Thousands of mine workers in Indonesia's remote Papua province protested for a third day Friday as marathon talks with US firm Freeport McMoRan over pay and benefits showed signs of progress.

"We have reached agreement on several of the main issues," said Betty Ibo from the West Papuan Workers Union involved in the discussions.

More than 2,000 workers from Freeport's giant gold and copper Grasberg mine started protesting peacefully Tuesday at the headquarters of PT Freeport Indonesia, which operates the mine, just outside the town of Timika.

The protracted dispute centres on demands for higher wages, improved welfare and boosted recruitment of Papuan workers as permanent employees and better advancement.

This week's rally has helped push world copper prices to 8,000 dollars a tonne amid concern disruptions could cause a drop in stockpiles of the metal.

Freeport has said the protest had not impacted on output but an Indonesian government minister said Thursday production had been slashed because of a lack of workers on site.

Ibo said a teleconference with Freeport executives in the United States, a consistent demand of the workers, was expected to take place early Saturday. She said declined to give details, saying she had to return to the talks which were ongoing late Friday.

Critics accuse Freeport of not giving enough to the people of Papua in return for the mine. They allege the mine causes pollution and that the military's protection of the site leads to human rights abuses. The firm disputes the claims.

Freeport operates concessions totalling 3.6 million hectares (8.9 million acres) stretching from the coast to the central mountain range at Timika, with its copper reserves estimated at 2.6 billion tonnes.

It runs its Grasberg mine in southwest Papua under a 30-year contract with the Indonesian government that began in 1992. The company owns 91 percent of PT Freeport Indonesia, with the rest in government hands.